Crystallex wants to exclude arguments from Guaidó's lawyers in case against Citgo

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Bancaynegocios

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Posted: March 19, 2019 - 13:42 pm ( 1 hour ago )

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The mining company Crystallex International is making efforts to prevent a US court from taking into account the arguments of the lawyers of the interim president of Venezuela, Juan Guaidó and the holders of Pdvsa 2020 bonds, which seek to avoid a Citgo auction that will allow the company The Canadian government will receive compensation of $ 1,400 million for the expropriation of its assets in the country during the government of Hugo Chávez. 

According to court documents cited by Redd Latam, Crystallex International is asking the court to exclude the arguments in the case presented by the representatives of Guaidó, after lawyers loyal to him tried to change Venezuela's strategy of ignoring the case.

Crystallex is also trying to ensure that the bondholders do not present oral arguments in the case about the possible auction of Citgo's assets, which is awaiting execution. 

The Canadian mining company filed the briefs in the Court of Appeals for the US Third Circuit in Philadelphia, where oral arguments on appeals are scheduled to be heard on April 16. The court will decide three separate cases that day: consider PDVSA as an alter ego of the Republic; allow Crystallex to take Citgo and auction the shares of the Venezuelan subsidiary for the recovery of the indemnification.

PDVSA and other creditors warned that an auction would destroy the value of Citgo's assets, while the holders of the Pdvsa 2020 bond (whose guarantee is half of the company's shares) fear being excluded or not receiving full payment of their investment. 

Crystallex and PDVSA had reached an out-of-court settlement, but the Venezuelan state violated them by not stopping the appeal process in court. 

Redd Latam details that the companies BlackRock Financial Management and Contrarian Capital Management, formally asked on March 7 to participate in an oral argument.

The lawyers of Pdvsa, the same ones that had contracted the government of Nicolás Maduro, but now work for Guaidó, requested a delay of four months, due to the power struggle that exists between the two presidents of Venezuela. The request was denied. 

"The mere fact that a debtor undergoes a change in leadership does not free the debtor from his obligations to the creditors," the Crystallex lawyers told Redd Latam. 

Citgo is currently under control of Guaidó, after the United States recognized him as interim president of Venezuela. There, a designated board of directors exercises in mid-February.